How a partially-covered license plate led to the DEA seizing $165K from Missouri pot shops




  • In US
  • 2021-11-11 20:58:34Z
  • By Kansas City Star
 

All it took was a partially-covered plate.

When Dickinson County Sheriff's Detective Kalen Robison pulled over a white Ford Transit van heading east on I-70 near Abilene in May, he justified the stop because a tag bracket was covering up the word "Colorado" on the plate.

The next day, Robison would pull over the same van, this time with the help of agents from the Drug Enforcement Administration (DEA). They would find $165,620 inside.

The DEA's seizure of the cash during a May 18 traffic stop has caught the attention of the marijuana industry in Missouri and nationally. The currency came from Kansas City-area dispensaries, which are legal under Missouri's medical cannabis program. Those close to the industry are watching to see whether the episode represents an unusual one-off or portends a shift in the federal government's posture after years of relative detente with pot businesses operating in accordance with state laws.

The van's operator, Empyreal Logistics, has reimbursed the dispensaries and is fighting the seizure in federal court in a case that remains murky.

But law enforcement documents obtained by The Star through a public records request provide the fullest account to date of the events that led the detective to pull over the van - twice - as it traveled through Kansas. The documents also reveal the locations of Empyreal's scheduled stops in the Kansas City area before the DEA seizure.

Missouri's marijuana industry, legalized by voters in 2018, is heavily reliant on cash as most banks refuse to take their money, fearing scrutiny from federal regulators and law enforcement. The institutions that do offer banking services to dispensaries are few and far between, forcing businesses to go to great lengths to make deposits.

"I was surprised when I saw there was a seizure of this van that was transporting proceeds that were generated in Missouri to … Colorado," both states where medical marijuana is legal, said Barry Grissom, a former U.S. Attorney in Kansas. "All this came from lawful activity in Missouri."

A photo taken by Robison of the driver's manifest lists four stops set for May 18, including BesaMe Wellness in Smithville and three From the Earth dispensaries: one on Southwest Blvd. and another on Troost Ave. in Kansas City, and one in Independence.

In a written report, Robison said DEA agents later watched the driver, who has not been charged, enter at least two dispensaries. A previously-reported affidavit from DEA Agent Bryson Wheeler said the driver entered multiple dispensaries in Kansas City, Mo.

From the Earth didn't respond to questions from The Star. Spokesman David Craig said "senior management is unavailable for comment about this story at this time."

From the Earth's state-issued licenses are held by several limited liability companies, all of which were organized by Nate Ruby. In a text, Ruby told The Star: "We aren't involved with that case so I probably can't help. It'll be a precedent setting case though."

A BesaMe spokesman, who would identify himself only as Cameron, said "basically none of those proceeds were ours." He said BesaMe was "totally and completely" unaffected by what happened. A public relations agent for the company, Will Gregory, later confirmed no BesaMe cash was seized but did not respond to inquiries about whether the business still sends money to deposit out-of-state.

Empyreal and an attorney representing the company in the forfeiture case didn't respond to questions.

Seizure 'unusual'

The unusual seizure has raised concerns for Missouri's burgeoning medical marijuana industry, which is expected to generate more than $200 million in sales this year but finding few in-state banks willing to take the money.

"The vast majority of banks in Missouri as well as across the country at this point … refrain from taking the risk that they're going to have to violate federal law" on accepting proceeds from the sale of a federally illegal drug, said Jackson Hataway, spokesman for the Missouri Bankers Association.

The banking "choke point" means businesses are either forced to deal in large amounts of cash, or turn to out-of-state banks or credit unions - institutions that are more often based in Colorado, where marijuana has been legal for much longer, Hataway said.

MoCannTrade, the state's primary trade association for marijuana businesses, has called for Congress to pass the Safe Banking Act, which would allow banks to accept legal cannabis proceeds without federal penalty. It's passed the House several times, most recently in September as part of a military funding bill.

Despite the clash between state and federal laws, federal law enforcement have largely left proceeds from marijuana businesses in legal, regulated states alone, Grissom said.

Grissom, who supports legalization, said he was surprised to learn of the seizure, which he described as "unusual." Federal prosecutors under the Obama administration were issued a directive not to stop legal marijuana business in states that were regulating the sales, and since 2014 Congress has barred the Justice Department from using funds to interfere with states' programs.

He said the case did not appear to indicate the federal government's intentions to prosecute the driver or truck company, or investigate Missouri's legal marijuana business. Still, the seizure contradicted past practices.

"It is still a Schedule I drug under the Controlled Substances Act but in light of the [Justice Department directive] and in light of what's been allowed to transpire in 47 other states… it is a little unusual," he said.

That's the argument Empyreal is making before a federal judge to demand the funds back. The company has already reimbursed the Missouri dispensaries for the seized cash, according to the company's court filings. A hearing is scheduled for early January.

Before the seizure, federal investigators had already been scrutinizing Missouri's medical marijuana program.

The state's health department, which licenses and regulates the businesses, was hit in November 2019 with a federal grand jury subpoena for records pertaining to four undisclosed license applicants, The Star reported last year.

Those were followed in 2020 by two additional subpoenas issued by the U.S. District Court for the Western District of Missouri and one this July issued by the DEA, as first reported this month by the St. Louis Post-Dispatch. The contents of all three are redacted, but the DEA subpoena directs the health department to send records to Agent Bryson Wheeler, the agent involved in the Empyreal seizure.

Pulled over for covered tag

While the broad outlines of the cash seizure from the Empyreal van have emerged through federal court filings, reports from the Dickinson County Sheriff's Office offer new details about how the interdiction came together.

On May 17, Dickinson County Sheriff's Detective Kalen Robison pulled over the van, with a Colorado tag, as it traveled west on I-70. In a written narrative of the stop, Robison said he pulled the van over for a "tag bracket covering up the word Colorado at the lower portion of the Colorado tag" - a minor violation.

Robison said that as the 28-year-old driver gathered her license and registration, he spoke with her about what she was hauling. "We run a lot of the cash business for dispensaries," she responded, according to Robison, who said the driver told him she was traveling to Missouri to pick up money from marijuana dispensaries and take it back to Colorado to be deposited.

Robison's narrative included a picture of a driver's manifest listing the From the Earth and BesaMe locations that he says the driver provided to him.

As Robison reviewed the documents provided by the driver, he called DEA Agent Wheeler. According to Robison, Wheeler told him that money from the sale of marijuana in Missouri can't leave the state and be transported to Colorado. That would amount to "bulk cash smuggling." Robison also wrote that he spoke with Assistant U.S. Attorney Colin Wood.

Robison wrote that the driver went as far as opening a rear safe and showing him a change order for BesaMe Wellness. Eventually, Robison wrote that he helped the driver remove the tag plate cover and released her from the stop.

Robison then called Wheeler, who told him the DEA would assist in surveilling the van in Missouri. Over the next day, DEA agents watched the driver enter at least two Kansas City-area dispensaries, he wrote.

On May 18, Robison again pulled over the van as it traveled back toward Colorado.

He wrote that he told the driver to exit the vehicle and that she asked to call her boss. "I explained … this was an investigation and I can't have her making phone calls yet," he wrote.

The van was moved to a county drug enforcement building, where the driver was "turned over to Agent Wheeler for an interview."

Wheeler's affidavit says a drug-sniffing dog later detected the odor of marijuana on the currency.

The Star's Bill Lukitsch contributed reporting

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