July 19, 2018 MJ Shareholders
A small crowd gathered outside Viola Extracts’ cultivation facility for a morning press conference on the banks of the Detroit River July 13. Inside, however, the warehouse was mostly empty.
More than a month prior, on May 29, Detroit police executed a search warrant and arrested six workers inside the facility. Police officers, in conjunction with U.S. Border Patrol agents, confiscated more than 100 lbs. of cannabis. The six were arraigned June 1 in Michigan’s 36th District Court.
Attorneys for the company told local reporters that Viola Extracts had obtained its temporary cannabis business permit from the city of Detroit. Viola investor Al Harrington, a former NBA star and longtime industry advocate, told Cannabis Business Times, “We’re a company that’s doing everything by the books. … They just decided to completely disregard all the paperwork that our company spent a lot of time obtaining.”
A spokesperson at the city’s Law Department confirmed to Cannabis Business Times that Viola Extracts had been granted zoning approval for its medical marihuana business (the “marihuana” spelling is a characteristic of the regulated Michigan market). Such approval is a prerequisite for earning a state license.
Michigan’s Department of Licensing and Regulatory Affairs (LARA) could not confirm whether Viola had submitted an application for a state license; a spokesman told Cannabis Business Times, “We are unable to discuss individual applicants and/or applications until or unless they are brought before the Medical Marihuana Licensing Board at a public meeting.” (Harrington said the company has submitted the application and is awaiting word from the licensing department.)
LARA issued its first seven medical marihuana licenses July 12; no licenses have been issued by the state for businesses located in Detroit as of July 18.
“At the end of the day, the issue with the industry is that a lot of people or entrepreneurs in the space—especially black and minority [entrepreneurs]—only get one time to get this right,” Harrington told Cannabis Business Times. “When you have raids like this that happen and they seize bank accounts … it puts you in a position where you can’t even fight. It’s out of your hands, and you’re done. You’re at the mercy of the court.”
The six defendants were each charged with controlled substance violations involving the delivery or manufacture of 45 kilograms or more of marijuana or 200 or more plants—a Class-C felony with a 15-year maximum prison sentence.
Four of the six defendants were also charged with conspiracy to commit controlled substance violation, a felony that similarly carries a 15-year maximum prison sentence.
Their next court hearing is scheduled for July 31.
Wanda James, owner of Simply Pure in Denver, Colo., was present at the press conference, as well. (Since 2014, Simply Pure has been buying and selling Viola Extracts products, as Viola also has a licensed cannabis operation in Colorado.) She said an earlier iteration of her edibles-focused dispensary was raided by police in 2009, and she joined the Michigan press conference to lend her voice to this reaction.
Her concern, then and now, is the question of due process and whether law enforcement actions are blowing past the local licensing and regulation process. The bottom line, she said, is that even in the event the judge were to dismiss the case (and that much remains unclear), the financial costs to Viola Extracts and to the nascent local cannabis economy are extremely high.
“Law enforcement raids of legally licensed and regulated operations across the country have been dating back now since the beginning of the licensing of cannabis [in the U.S.], and we need to bring a face and understanding of what is happening,” she said at the July 13 press conference. “These businesses are unable to recover, resulting in loss of high-paying jobs and marketable skills.”
More than 40,000 people are working in the licensed Colorado industry, she pointed out, adding that business owners across the country are hoping to see similar job growth in newer markets like Michigan.
“Because of these new laws and emergency regulations, companies from all over the country—legitimate companies—are coming here and investing in the city of Detroit,” attorney Barton Morris said at the press conference. “They’re investing in the state of Michigan. They’re investing in our economy in order to bring regulated commercial cannabis cultivation here in the city.”
Shifting to his thoughts on the law enforcement raid, Morris continued: “This is nothing more than their greed. This is nothing more than their inability to understand what is going on. The fact that they are significantly hurting this economy, they are hurting the city of Detroit, they’re hurting the state of Michigan—it’s going to discourage people from coming into this state and into this city to bring the significant revenue, resources and opportunity that they have the ability to [bring]. They are discouraging that by engaging in the behavior that they have done. They have trampled on the rights of our clients. They have put people in jail, and they have stolen our money. That is the reason we are fighting back.”
“At the end of the day, the issue with the industry is that a lot of people or entrepreneurs in the space—especially black and minority [entrepreneurs]—only get one time to get this right.”
– Al Harrington
Harrington told CBT that Viola specifically chose Detroit because of the investment implications: local jobs, the rehabilitation of an old riverfront warehouse, civic participation in a burgeoning industry. (Viola also has corporate operations in Colorado, Oregon and California.)
“We want to be able to operate,” Harrington said. “We want to be able to go out and [take] our advantage of being the first to market in a huge market like Michigan.”
Top photo courtesy of Viola Extracts. Press conference screenshot courtesy of Wanda James/Facebook
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